Experts Talk Ukraine Prospects Under New Government
30 August, 2019
From left to right: Ukraine's Minister of Defense Andriy Zahorodnyuk, Prime Minister Oleksiy Honcharuk, and the Minister of Foreign Affairs Vadym Prystaiko at the first parliamentary session on August 29, 2019. EPA-EFE/SERGEY DOLZHENKO
After a busy day (and night) in the Ukrainian Parliament, the country now has a complete Cabinet. The new government is young, but how ready are they really to make changes that will be felt by the people of Ukraine? We asked experts to provide their opinions on the new ministers.

Andreas Umland, expert at the Euro-Atlantic Cooperation Institute in Kyiv:

"The new government consists of new people, some of them have foreign degrees. But at this stage, it is difficult to say what they will be like because many of them have no governmental experience. 

Just as it could be a good new start, we could also be in for some unpleasant surprises if some of them are not adequate for the function. At the same time, I would give them the benefit of the doubt, hoping that this will be a good new government that will use the chance to break the old patterns of patronal politics in Ukraine.

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In my opinion, Ulana Suprun's successor Zoryana Skaletska (better known by her previous name Chernenko -ed.) is as qualified as Suprun. She even seems to be ideologically close to Suprun. I think this was more a question of the personality of Suprun who is a very unpopular politician in Ukraine. According to opinion polls she is extremely unpopular. Unjustifiably so, but it's a fact and I'm positive about this change because, in substance, not much will change with the new minister in place. 

With Arsen Avakov, it is a more complicated matter. This may have been a tactical move by Volodymyr Zelenskyy because he may feel obliged to Avakov for preventing falsification during the election campaigns. I do hope that this is only for a transitional period and later on there will be a new minister, who is younger, and with a less dubious background."

Volodymyr Fesenko, Director of the Kyiv-based Penta Center for Political Studies"

"Generally, the composition has good prospects.

Some of the ministers are recognizable and have a good reputation, like Dmytro Kuleba (Vice Prime Minister for European and Euro-Atlantic Integration). Others are virtually unknown, for instance: Energy Minister Oleksiy Orzhel, and Justice Minister Denys Malyuska. But these are all PM's people: they had worked with him previously, thus the new Cabinet was formed in a similar fashion to how Volodymyr Groysman formed his. 

All in all, it is highly likely that this government will continue and strengthen reforms, both structural, economic and other.

But obviously it is too early to judge how effective they are. What we do know is that most ministers have no experience in state management, which is a serious challenge. Let’s also not forget that the new PM and government are the youngest Ukraine has seen in its history.

The state machine is very idiosyncratic. So we see that to ensure some stability in key vectors two previous ministers remain in their positions: Interior Minister Arsen Avakov and Finance Minister Oksana Markarova. But this was predictable anyway. 

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I should also note that if the Parliament approves a Government program during the next few sittings - there should be no problems with that - according to the Constitution, the Cabinet will have a 12-month “immunity” where ministers cannot be legally dismissed, only of their own volition."

Daria Kaleniuk, executive director of the Anti-Corruption Action Center (AntAC):

"The new composition of the government has both positive and negative appointments. But there is a fly in the ointment. This is, of course, Arsen Avakov. His reappointment was the biggest disappointment from yesterday for the civil society and for those who suffered from police's inaction, from the sabotaged investigation of [civil activist Kateryna] Handzyuk murder, for the [murdered] five-year-old [Kyrylo] Tlyavov's relatives. Unfortunately, Zelenskyy took on the responsibility of letting an old face into the new government. From now on, every murder covered up, every uninvestigated case of attacks on people and activists by police will become personal responsibility of the President. Avakov is the symbol of symphysis of the crime world with law enforcement. He won't change the system - he will cement it. Alas, this is now the responsibility of the new face in the position of president of Ukraine. 

The appointment of a new health minister also came as a blow. One of the arguments for leaving Avakov in place was that he is a professional. At the same time, Suprun was let go despite the difficult and crucial steps she took to implement the medical reform. I wouldn’t be so sure that the new health minister will continue her course considering the backstage discussions prior to her appointment. Earlier, one media published a picture of the new head of Committee on Nation Health, Medical Assistance, and Health Insurance Mykhailo Radutsky’s reaction to the appointment of Zoryana Chernenko. This kind of back-channel talks and obscurity with regard to the selection of the health minister is troubling. In my opinion, medical reform is jeopardized. 

As for the rest of the ministers we see a lot of new faces with a positive reputation starting with [PM Oleksiy] Honcharuk himself. There is hope that there'll be substantial progress in economic reforms and that we’ll see genuine changes for better. 

But this presence of a strong political player Avakov, who transformed the police into his private army, can bring to naught everything positive."  

James Brooke, Editor-in-chief of Ukraine Business News:

"In my opinion, PM Honacharuk's economic promises are not overly optimistic. Head of the National Bank (NBU) Yakiv Smoliy repeatedly states on the official NBU website that the prime rate will be cut in half, hitting 9% by the end of 2020. This will render a mortgage rate of 12-13% possible. This alone will trigger massive investment into Ukraine. We are looking at billions of dollars of potential investments. 

Take Dnipro River, for example. It was the Mississippi of Ukraine, but now handles around 10% of the traffic it used to. A river reform should be pushed through that will draw money in. 

As for the airports, there will be concessions issued for most terminals, and runways of the top 10 regional airports will probably be rebuilt. Ukraine already has the fastest-growing air traffic in Eastern Europe, whilst Kyiv’s Boryspil Airport is the number two fastest-growing airport in all of Europe. 

But one of the most important points is allowing private freight trains and small private passenger trains. The real issue here is allowing private locomotive to pull freight trains down to ports. This is what is really needed because even without private land market crop yields are growing: we saw 12% growth this year, for instance. The main problem right now is getting the crop from the farm gate to the dock. Especially, considering the fact that by mid-2020 Ukraine will have surpassed 100 million tonnes of grain crops (compared to the record 70 million tonnes in 2018).

Moreover, the private land market will unleash billions of dollars of investments. The new minister [Tymofiy Mylovanov] is a smart, rational, free-market person. So we can expect there'll be gradual introduction of the private land market. Initially, probably restricted to Ukrainian nationals with size restrictions and set prices so that farmers’ interests are protected. But that will increase yields by projecting money into rural areas. We’ll see better techniques, fertilizers, and equipment. This will increase yield by up to 50% in some areas. 

Regarding privatization: there are 3,000 state companies that are half-dead or dead altogether. They need to be sold off. As an example, take the state-owned President Hotel in Kyiv. There are almost 400 rooms! It will be sold this year. Obviously, a proper audit has to be done, books need to be in good shape. 

All in all, if you look around the clock: there is a lot to invest in. It really is a great time to be in Ukraine!"

READ MORE: Meet the Ministers: What We Know About Ukraine’s New Cabinet